Commission of the European Communities v Ireland.
Date: 1997-06-12
6 As to the former, it claims that, by restricting the right to be registered in the Irish register and to fly the Irish flag to vessels which are owned or shared by the Government, a Minister of State, an Irish citizen or an Irish body corporate, sections 9 and 16 of the Mercantile Marine Act discriminate on grounds of nationality, contrary to Article 52 of the Treaty.  According to the Commission, the same applies to the requirement under section 2 of the Act in conjunction with section 9 that companies owning vessels registered in Ireland must be established under and subject to Irish law and have their principal place of business in Ireland.  It relies in that regard on the judgments in Case C-221/89 The Queen v Secretary of State for Transport ex parte Factortame and Others [1991] ECR I-3905, in Case C-93/89 Commission v Ireland [1991] ECR I-4569, in Case C-246/89 Commission v United Kingdom [1991] ECR I-4585 and in Case C-334/94 Commission v France [1996] ECR I-1307.
7 The Commission also considers that the requirement under sections 2 and 9 of the Act impedes the freedom of establishment of companies fulfilling the conditions laid down in Article 58 of the Treaty.  Furthermore, the argument that registration is not needed in order to exercise the right of establishment was expressly rejected in Factortame and Others, at paragraph 25.
8 As regards vessels not used to pursue an economic activity, the Commission considers that, although registration of a pleasure craft does not concern conditions of employment in the strict sense, the opportunity for Community nationals to pursue leisure activities in the host Member State is a corollary of their right to freedom of movement under Articles 48 and 52 of the Treaty, which prohibit all discrimination on grounds of nationality.  Under Article 7 of Regulation No 1251/70 and Article 7 of Directive 75/34, the same holds for persons entitled to remain in a Member State after working there. The Commission refers in that regard to the judgment in Commission v France, cited above, paragraphs 20 to 23.
10 As regards the admissibility of the action which Ireland has not contested, it was only in its reasoned opinions that the Commission first complained that Irish legislation was contrary to Article 7 of Regulation No 1251/70 and Article 7 of Directive 75/34.  Nevertheless, as the Advocate General has stated in point 4 of his Opinion, the letters of formal notice identified to a sufficient extent the alleged failure by Ireland to fulfil its obligations, namely that it had retained certain provisions of the Mercantile Marine Act which were incompatible with the Treaty provisions relating to freedom of movement for persons.  Those letters thus informed the Irish Government of the nature of the complaints against it and gave it the opportunity to submit its defence (see, to this effect, Case C-289/94 Commission v Italy [1996] ECR I-4405, paragraph 17).  Accordingly, this action is admissible in so far as it relates to infringement of Article 7 of Regulation No 1251/70 and Article 7 of Directive 75/34.
11 As to the substance, it suffices to note that in Commission v France, cited above, the Court examined whether legislation similar to the Irish legislation at issue was compatible with Community law.
12 As regards vessels used for the pursuit of an economic activity, the Court noted that, in exercising its powers for the purpose of defining the conditions for the grant of its `nationality' to a vessel, each Member State must comply with the prohibition of discrimination against nationals of Member States on grounds of nationality, and that a condition which stipulates that where a vessel is owned or chartered by natural persons they must be of a particular nationality and, in the case of a company, the shareholders and directors must be of that nationality is contrary to Article 52 of the Treaty (Commission v France, paragraph 14, referring to Factortame and Others, paragraphs 29 and 30).  Furthermore, Irish legislation is contrary to Articles 52 and 58 of the Treaty in so far as it requires legal persons owning vessels to be established under and subject to Irish law and to have their principal place of business in Ireland and, therefore, precludes registration or management of a vessel in the case of a secondary establishment such as an agency, branch or subsidiary (Commission v France, paragraph 19).
13 As regards vessels not used for the pursuit of an economic activity, the Court pointed out in Commission v France that, under Community law, every national of a Member State is assured of freedom both to enter another Member State in order to pursue an employed or self-employed activity and to reside there after having pursued such an activity.  Access to leisure activities available in that State is a corollary to that freedom of movement (paragraph 21).
14 It follows that registration by such a national of a pleasure craft in the host Member State falls within the scope of the Community provisions relating to freedom of movement for persons (Commission v France, paragraph 22).
15 Irish legislation under which only Irish nationals may register in Ireland pleasure craft which they own is therefore contrary to Articles 6, 48 and 52 of the Treaty, Article 7 of Regulation No 1251/70 and Article 7 of Directive 75/34 (Commission v France, paragraph 23).