CELEX: C2003/044/29
Language: en
Date: 2003-02-22 00:00:00
Title: Case C-464/02: Action brought on 23 December 2002 by the Commission of the European Communities against the Kingdom of Denmark

22.2.2003                EN                       Official Journal of the European Union                                            C 44/15
Action brought on 20 December 2002 by the Commission                      23 December 2002 by the Commission of the European
of the European Communities against the Grand Duchy                       Communities, represented by N. B. Rasmussen and D. Martin,
                          of Luxembourg                                   acting as Agents, with an address for service in Luxembourg.
                          (Case C-461/02)
                                                                          The applicant claims that the Court should:
                           (2003/C 44/28)
                                                                          —     Declare that, in so far as it does not, under its legislation
                                                                                and administrative practice, allow employees who work
                                                                                outside Denmark and are resident in Denmark to use for
An action against the Grand Duchy of Luxembourg was                             commercial or private purposes a company car registered
brought before the Court of Justice of the European Communi-                    in a neighbouring country where the undertaking of
ties on 20 December 2002 by the Commission of the European                      their employer has its principal office, the Kingdom of
Communities, represented by H. Støvlbæk and F. Simonetti,                       Denmark has failed, within the terms of Article 226 EC,
acting as Agents, with an address for service in Luxembourg.                    to fulfil its obligations under the combined provisions of
                                                                                Articles 39 EC and 10 EC;
The applicant claims that the Court should:
                                                                          —     Declare that, in so far as, under its legislation and
—     declare that, by not reporting to the Commission every                    administrative practice, it allows employees who work in
      two years on the results of the measures taken to                         another EU Member State and are resident in Denmark
      implement the programmes provided for in Council                          to use for commercial and/or private purposes a motor
      Directive 93/76/EEC of 13 September 1993 to limit                         vehicle, in particular a company car, which is registered
      carbon dioxide emissions by improving energy efficiency                   in another Member State in which the undertaking of
      (SAVE) (1), the Grand Duchy of Luxembourg has failed to                   their employer has its principal office or seat, only subject
      fulfil its obligations under Article 9 of that directive;                 to the conditions (i) that the work in the foreign
                                                                                undertaking is the main activity engaged in by the person
—     order the Grand Duchy of Luxembourg to pay the costs.                     concerned and (ii) that duty is paid on that vehicle, the
                                                                                Kingdom of Denmark has failed, within the terms of
                                                                                Article 226 EC, to fulfil its obligations under the com-
                                                                                bined provisions of Articles 39 EC and 10 EC;
Pleas in law and main arguments
                                                                          —     Order the Kingdom of Denmark to pay the costs of the
In view of the period prescribed for transposing the directive,                 present proceedings.
a first report on the results of the measures taken to implement
the programmes provided for in the directive should have
been submitted to the Commission on 31 December 1996
and a second report on 31 December 1998. The Luxembourg
authorities’ lack of resources cannot be used to justify breach           Pleas in law and main arguments
of an obligation under a directive.
( 1) OJ L 237 of 22.9.1993, p. 28.                                        The Danish rules which form the basis of the present
                                                                          action were amended during the course of the administrative
                                                                          procedure. According to the ‘previous scheme’ (see Notice
                                                                          No 18 of the Ministry of Justice of 10 January 1992, which
                                                                          subsequently became Notice No 592 of the Ministry of
                                                                          Transport of 24 June 1996), Danish residents who used a
                                                                          motor vehicle that had been registered by an employer/
                                                                          undertaking outside Denmark could, as a main rule, do so
Action brought on 23 December 2002 by the Commission                      only if the vehicle was registered in Denmark or if authorisation
of the European Communities against the Kingdom of                        was granted. In the event of registration being required,
                              Denmark                                     registration duty was also payable under the terms of the
                                                                          Danish Law on registration duty. Under this legislation it was
                                                                          Danish administrative practice to refuse to issue authorisations
                          (Case C-464/02)
                                                                          requested for the purpose of ‘commercial trips within Den-
                                                                          mark, including visits to clients’. Authorisation could, however,
                           (2003/C 44/29)                                 be granted for vehicle use for the purpose of driving directly
                                                                          between the Danish-German border and the place of residence
                                                                          of the person concerned, but only with regard to weekends or
                                                                          holidays. Under no circumstances was it permitted to use
An action against the Kingdom of Denmark was brought                      company cars for private purposes, for example, outside of
before the Court of Justice of the European Communities on                working time.
 ---pagebreak--- C 44/16               EN                        Official Journal of the European Union                                       22.2.2003
Under the ‘amended scheme’ (see the Notice of the Ministry of           seeking employment and obstacles that prevent an employer
Transport of June 1999 on the registration and MOT-testing              from offering such use will have the result of discouraging
of vehicles), Danish workers resident in Denmark may use                Danish residents — in contrast to persons resident outside
within Denmark a foreign registered vehicle without having to           Denmark — from seeking employment in a foreign undertak-
register it in Denmark, subject to compliance with the                  ing offering such ancillary private use of a company car.
condition that the work for the undertaking or at the
established place of operation outside Denmark constitutes the
main activity of the person concerned. The full registration            The Danish Government has set out four principal grounds of
duty need not therefore be paid inasmuch as registration is not
                                                                        justification: the interest in maintaining supervision (road
required. On the other hand, the Law on registration duty does
                                                                        safety and the monitoring and control of road users), the
require payment of a charge which is defined as a part payment          interest in preventing the erosion of tax revenue in Denmark,
calculated on the basis of the full registration duty or —
                                                                        the fact that certain barriers resulting from differences in
following authorisation and subject to the further condition            taxation levels must be accepted, and the interest in achieving
that the car is used solely for commercial purposes — as a
                                                                        equivalent conditions of competition as between Danish and
periodic payment of a fixed amount.
                                                                        non-Danish undertakings. None of these considerations can
                                                                        justify the Danish rules, whether by reference to the dero-
                                                                        gations from Article 39 EC authorised by the Treaty or to the
                                                                        case-law which states that national measures liable to restrict
                                                                        the exercise of the fundamental freedoms guaranteed by the
                                                                        Treaty or to make the exercise of those freedoms less attractive
                                                                        may be accepted under certain conditions.
Both the ‘previous scheme’ and the ‘amended scheme’ create
barriers to the free movement of workers contrary to the
combined provisions of Articles 39 EC and 10 EC. It is                  Finally, the Commission disputes the contention that Council
contrary to Article 39 EC to introduce or retain national               Directive 83/182/EEC (2) can be construed as meaning that the
provisions which give rise to obstacles to the free movement            Danish rules may be treated as lawful, quite apart from the fact
of workers, irrespective of whether the national provisions             that provisions of secondary Community law cannot exempt
apply indiscriminately, if the provisions affect workers’ access        a Member State from its obligations under the combined
to the labour market. The Danish rules are precisely of such a          provisions of Articles 39 EC and 10 EC.
character. A worker resident outside Denmark will, as a matter
of course, be able to use a foreign company car within
Denmark without having to obtain authorisation or to pay                (1 ) Case C-297/99 Skills Motor Coaches and Others [2001] ECR I-
duty. There is thus clear discrimination of a person resident in             573.
Denmark vis-à-vis a person resident outside Denmark in                  (2 ) Council Directive 83/182/EEC of 28 March 1983 on tax exemp-
respect of precisely the same use in Denmark of a foreign                    tions within the Community for certain means of transport
                                                                             temporarily imported into one Member State from another (OJ
registered company car. In conclusion, a worker who does not
                                                                             L 105 of 23.4.1983, p. 59).
perform his ‘main activity’ within the foreign undertaking —
which might precisely point to an extremely limited use of the
company car — is prohibited from using that company car
within Denmark. It seems obvious that an employer will
thereby be dissuaded from employing a person resident in
Denmark in preference to a worker resident outside Denmark
as the above obstacles exist even for purely commercial use of
the vehicle. It is in this context of secondary importance
whether the Danish rules can be regarded as constituting a
barrier to a worker’s right to seek employment outside of               Action brought on 23 December 2002 by the Commission
Denmark or a barrier to an employer’s prospects of recruiting           of the European Communities against the Kingdom of
workers resident in Denmark. There will be a barrier irrespec-                                        Belgium
tive of whether it is the employer or the employee who must
pay the costs and obtain authorisation or effect registration.
                                                                                                  (Case C-469/02)
                                                                                                   (2003/C 44/30)
With specific reference to ancillary private use, it should be
noted at the outset that transport from one’s place of residence        An action against the Kingdom of Belgium was brought
to one’s place of work cannot be treated as constituting ‘private       before the Court of Justice of the European Communities on
use’; this follows from the judgment in Case C-297/99 Skills            23 December 2002 by the Commission of the European
Motor Coaches Ltd ( 1). The possibility of ancillary private use        Communities, represented by H. Michard, acting as Agent,
of a company car is an obvious incentive when it comes to               with an address for service in Luxembourg.