Association Eglise de scientologie de Paris and Scientology International Reserves Trust v The Prime Minister.
Date: 2000-03-14
14 A provision of national law which makes a direct foreign investment subject to prior authorisation constitutes a restriction on the movement of capital within the meaning of Article 73b(1) of the Treaty (see, to this effect, Joined Cases C-163/94, C-165/94 and C-250/94 Sanz de Lera and Others [1995] ECR I-4821, paragraphs 24 and 25).
17 It should be observed, first, that while Member States are still, in principle, free to determine the requirements of public policy and public security in the light of their national needs, those grounds must, in the Community context and, in particular, as derogations from the fundamental principle of free movement of capital, be interpreted strictly, so that their scope cannot be determined unilaterally by each Member State without any control by the Community institutions (see, to this effect, Case 36/75 Rutili v Minister for the Interior [1975] ECR 1219, paragraphs 26 and 27). Thus, public policy and public security may be relied on only if there is a genuine and sufficiently serious threat to a fundamental interest of society (see, to this effect, Rutili, cited above, paragraph 28, and Case C-348/96 Calfa [1999] ECR I-11, paragraph 21). Moreover, those derogations must not be misapplied so as, in fact, to serve purely economic ends (to this effect, see Rutili, paragraph 30). Further, any person affected by a restrictive measure based on such a derogation must have access to legal redress (see, to this effect, Case 222/86 Unectef v Heylens and Others [1987] ECR 4097, paragraphs 14 and 15).
18 Second, measures which restrict the free movement of capital may be justified on public-policy and public-security grounds only if they are necessary for the protection of the interests which they are intended to guarantee and only in so far as those objectives cannot be attained by less restrictive measures (see, to this effect, Sanz de Lera and Others, cited above, paragraph 23).
19 However, although the Court has held, in Joined Cases C-358/93 and C-416/93 Bordessa and Others [1995] ECR I-361 and in Sanz de Lera and Others, which concerned the exportation of currency, that systems of prior authorisation were not, in the circumstances particular to those cases, necessary in order to enable the national authorities to carry out checks designed to prevent infringements of their laws and regulations and that such systems consequently constituted restrictions contrary to Article 73b of the Treaty, it has not held that a system of prior authorisation can never be justified, particularly where such authorisation is in fact necessary for the protection of public policy or public security (see judgment of 1 June 1999 in Case C-302/97 Konle v Austria [1999] ECR I-0000, paragraphs 45 and 46).
21 In the present case, however, the essence of the system in question is that prior authorisation is required for every direct foreign investment which is such as to represent a threat to public policy [and] public security, without any more detailed definition. Thus, the investors concerned are given no indication whatever as to the specific circumstances in which prior authorisation is required.
22 Such lack of precision does not enable individuals to be apprised of the extent of their rights and obligations deriving from Article 73b of the Treaty. That being so, the system established is contrary to the principle of legal certainty.