Commission of the European Communities v Portuguese Republic.
Date: 2009-10-22
26. As a preliminary point, it should be noted that Directive 96/96 has the object, according to recital 33 thereof, of achieving harmonisation of the rules on roadworthiness tests, in particular, as indicated in Article 1(2) thereof, by determining the categories of vehicles to be tested, the frequency of those tests and the items which must be tested. That directive does not, however, contain any provision concerning the rules on access to vehicle inspection activities.
27. Whilst it is true that, in a sector which has not been subject to full harmonisation at Community level, Member States remain, in principle, competent to define the conditions for the pursuit of the activities in that sector, they must, when exercising their powers, respect the basic freedoms guaranteed by the EC Treaty (see Case C-393/05 Commission  v Austria  [2007] ECR I‑10195, paragraph 29, and Case C‑404/05 Commission  v Germany  [2007] ECR I‑10239, paragraph 31 and the case-law cited).
29. It is settled case-law that all measures which prohibit, impede or render less attractive the exercise of the freedom of establishment must be regarded as restrictions of that freedom (see, inter alia, Case C‑79/01 Payroll and Others  [2002] ECR I‑8923, paragraph 26; Case C‑442/02 CaixaBank France  [2004] ECR I‑8961, paragraph 11; and Case C‑157/07 Krankenheim Ruhesitz am Wannsee‑Seniorenheimstatt  [2008] ECR I‑0000, paragraph 30).
34. On the other hand, it should be borne in mind that, as a derogation from the fundamental rule of freedom of establishment, Article 45 must be interpreted in a manner which limits its scope to what is strictly necessary in order to safeguard the interests which it allows the Member States to protect (see, inter alia, Case 147/86 Commission  v Greece  [1988] ECR 1637, paragraph 7; Case C-114/97 Commission  v Spain  [1998] ECR I-6717, paragraph 34; and Case C-451/03 Servizi Ausiliari Dottori Commercialisti  [2006] ECR I-2941, paragraph 45).
35. Similarly, it is not contested that the review of exceptions to the freedom of establishment laid down in Article 45 EC must take into account the Community character of the limits imposed by that article on that freedom (see, to that effect, Case 2/74 Reyners  [1974] ECR 631, paragraph 50, and Commission  v Greece , paragraph 8).
36. Thus, according to settled case-law, the derogation for which that article provides must be restricted to activities which, in themselves, are directly and specifically connected with the exercise of official authority (see Reyners , paragraph 45; Case C‑42/92 Thijssen  [1993] ECR I‑4047, paragraph 8; and Case C‑283/99 Commission  v Italy  [2001] ECR I‑4363, paragraph 20), which excludes from being regarded as ‘connected with the exercise of official authority’, within the meaning of that derogation, functions that are merely auxiliary and preparatory vis-à-vis an entity which effectively exercises official authority by taking the final decision ( Thijssen , paragraph 22; Commission  v Austria , paragraph 36; and Commission  v Germany , paragraph 38).
37. The Court has defined further the distinction between activities of private bodies constituting simple preparatory tasks and those constituting a direct and specific connection with the exercise of official authority by finding that, even where private bodies exercise the powers of a public authority, drawing the conclusions from the inspections which they carry out, Article 45 EC cannot be relied on where the applicable legislation lays down that those private bodies are to be supervised by the public authority (see, to that effect, Commission  v Austria , paragraph 41, and Commission  v Germany , paragraph 43). The Court has found that private bodies carrying out their activities under the active supervision of the competent public authority, responsible, ultimately, for inspections and decisions of those bodies, cannot be considered to be ‘connected directly and specifically with the exercise of official authority’ within the meaning of Article 45 EC ( Commission  v Austria , paragraph 42, and Commission  v Germany , paragraph 44).
40. The tasks within the first stage are of a technical nature and thus unrelated to the exercise of official authority (see, to that effect, Case C‑3/88 Commission  v Italy  [1989] ECR 4035, paragraph 13). On the other hand, the second stage, involving the certification of roadworthiness, includes the exercise of public authority powers, in that it concerns the drawing of legal conclusions from the roadworthiness test.
41. In that regard, it should, none the less, be pointed out that the decision whether or not to certify roadworthiness, which essentially only records the results of the roadworthiness test, on the one hand, lacks the decision‑making independence inherent in the exercise of public authority powers and, on the other hand, is taken in the context of direct State supervision.
44. In addition, as the Commission has pointed out, without being contradicted by the Portuguese Republic, the private vehicle inspection bodies, in connection with their activities, have no power of coercion, the right to impose penalties for failure to comply with the rules on vehicle inspection belonging to the police and judicial authorities.
46. It is clear from settled case‑law that a restriction on freedom of establishment is warranted only if it is justified by overriding reasons of public interest. In that situation, it must also be suitable for securing the attainment of the objective which it pursues and not go beyond what is necessary in order to attain that objective (see, to that effect, judgment of 27 October 2005 in Case C-158/03 Commission  v Spain , paragraph 35; Case C‑518/06 Commission  v Italy [2009] ECR I‑0000, paragraph 72; and Case C-531/06 Commission  v Italy  [2009] ECR I‑0000, paragraph 49).
47. In that regard, it is for the competent national authorities to show, first, that their legislation is necessary in order to attain the objective pursued and, second, that the legislation is in conformity with the principle of proportionality (see, to that effect, Case C-54/05 Commission  v Finland  [2007] ECR I‑2473, paragraph 39, and Case C‑297/05 Commission  v Netherlands  [2007] ECR I‑7467, paragraph 76).
48. In the present case, the justification put forward by the Portuguese Republic during the pre‑litigation procedure relates to the need to ensure road safety, which, according to settled case‑law, constitutes an overriding reason relating to the public interest (see, in particular, Commission  v Netherlands , paragraph 77, and Case C‑110/05 Commission  v Italy  [2009] ECR I‑0000, paragraph 60).
51. However, it should be pointed out that, according to settled case‑law, the amendments introduced by the national legislation are irrelevant for the purpose of ruling on the subject of an action for failure to fulfil obligations, since they were not initiated before the expiry of the period fixed in the reasoned opinion (see, in particular, Case C‑173/94 Commission  v Belgium  [1996] ECR I‑3265, paragraph 16, and Case C‑66/06 Commission  v Ireland  [2008] ECR I‑0000, paragraph 91). The Portuguese Republic cannot thus plead the legislative amendments which are to take effect after that date.