The European Commission has decided to refer Italy, Austria, Portugal, Spain and Belgium to the European Court of Justice for breaching EC Treaty rules on freedom to provide services and freedom of establishment. The Commission has also decided to send Germany a reasoned opinion for a similar problem. As regards Italy, there are four separate cases concerning respectively private security agents, consignors of goods, organisation of fairs and exhibitions and commercial agents. The other problems concern discriminatory rules for workers on secondment from another Member State (Austria, Belgium and Germany), aerial photography (Portugal) and a financial guarantee required from non-nationals to cover lawyers' fees (Spain). In the case of the reasoned opinion (the second stage of formal infringement procedures under Article 169 of the EC Treaty), the Commission may decide to institute proceedings in the Court of Justice unless a satisfactory reply is received from the German authorities within two months of receipt.

Italy - restrictions on private security activities

Under Law No 773 on public security (Testo Unico delle Legge di Pubblica Sicurezza) of 18July 1931, persons or companies must be of Italian nationality and established in Italy in order to obtain authorisation to exercise private security activities. The same law stipulates that private security companies must employ only Italian nationals and that only Italian nationals may work as self-employed private security personnel. The Commission consider that this legislation constitutes an unjustified restriction on the free movement of workers, freedom of establishment and freedom to provide services in contravention of the EC Treaty (Articles 48, 52 and 59 respectively). This interpretation of Single Market rules has been confirmed by a 29 October 1998 ruling of the Court of Justice on case C-114/97, concerning restrictions on private security services in Spain. The Commission has decided to refer this case to the Court of Justice because the Italian authorities' response to its reasoned opinion was not satisfactory.

Austria - workers seconded by service suppliers from another Member State

The Commission has decided to refer Austria to the Court of Justice over an Austrian law amending the labour contract law (Arbeitsvertragsrechts - Anpassungsgesetz or "AVRAG"), which contains discriminatory measures concerning the conditions for the detachment or provision of salaried workers by a service supplier established in another Member State. Under this law, the customer of a foreign service supplier (for example, a contractor in the construction trade who requests a subcontractor to carry out a specific task) is jointly and severally liable for payment of the salaries of the workers concerned and is required to keep the documents relating to the details of the labour contract, whereas such conditions do not apply if the service supplier is established in Austria. In addition, the fines applicable to suppliers of cross-border services and their Austrian customers are more severe than those applicable to suppliers established in Austria and their customers. The Commission considers that the legislation in question, which has still not been amended to the satisfaction of the Commission, constitutes an unjustified restriction on the free movement of services in contravention of Article 59 of the EC Treaty.

Italy - restrictions concerning consignors of goods

The Commission has decided to refer Italy to the Court of Justice concerning an Italian Law (N° 1442 of 14 November 1941) which requires all natural or legal persons acting as consignors of goods to be entered on a special register held by the Chamber of Commerce competent for the particular geographical area. The Commission considers that this requirement constitutes an unjustified obstacle for professionals lawfully carrying on their activity in another Member State and who, from time to time, may wish to do so in Italy. In particular, this provision is incompatible with the principle of the freedom to provide services (Article 59 of the Treaty), in the Commission's view. The Italian authorities' reply to a letter of formal notice was unsatisfactory and they did not reply to the reasoned opinion sent in May 1998.

Italy - organisation of fairs and exhibitions

The Commission has decided to refer Italy to the Court of Justice because of a series of restrictions on the organisation of fairs and exhibitions imposed by Italian legislation at both regional and national levels. These restrictions are incompatible with basic principles of Community law, namely the right of economic operators based in one Member State to organise such events in another Member State (freedom to provide services - Article 59 of the EC Treaty) and the right of economic operators to establish themselves in another Member State (freedom of establishment - Article 52). The Italian authorities have made commitments to resolve these problems but have failed to notify the necessary legislative measures or respond to the Commission's reasoned opinion.

Italy - commercial agents

The Commission has decided to refer Italy to the Court of Justice for failing to adopt all the measures necessary to implement correctly the Directive on self-employed commercial agents (86/653/EEC). Italy adopted measures to implement the Directive into Italian law in 1991, but failed to implement a number of specific provisions of the Directive. Firstly, with regard to the conditions under which an agent is entitled to be indemnified on termination of his contract, Italy requires only that the agent should have brought in new customers or that the indemnity should be equitable, whereas the Directive requires both conditions to be met. Secondly, each party to an agency contract is entitled under the Directive to request that a copy of a written contract be provided or that a verbal agreement be evidenced in writing. Italian law does not require the contract to be in writing. In the case of a verbal agreement, there is no obligation on either party to give the other a document setting out the terms of the agreement. Thirdly, under Italian law the entitlement to commission on transactions concluded after the agency contract has terminated is not restricted to transactions entered into within a reasonable period after termination of the contract. Although the Italian authorities informed the Commission that the law was due to be amended in 1998 in accordance with the Commission's wishes, no such amendment has yet been notified to the Commission.

Portugal - aerial photography

The Commission has decided to refer Portugal to the Court of Justice concerning a Portuguese ministerial order N° 17568 of 6 February 1960, which establishes principles for the authorisation of aerial photographs. The law in question states that bodies or persons of foreign nationality wishing to engage in aerial photography but are not established in Portugal will be authorised to do so only in duly justified cases. The Commission considers that this provision constitutes discrimination on the basis of nationality and is incompatible with the freedom to provide services (in violation of Articles 6 and 59 of the Treaty respectively). The Portuguese authorities' reply to the reasoned opinion sent in May 1998 was not satisfactory. The Commission had already decided to refer Belgium to the Court for similar restrictions (see IP/98/5).

Spain - financial guarantee required to cover lawyers' fees

The Commission has decided to refer Spain to the Court of Justice because of a requirement under the Spanish code for civil proceedings (the LEC) for foreign nationals who act as plaintiffs before national courts to give a financial guarantee to cover costs and lawyers' fees (known as "cautio iudicatum solvi") upon application by the defendant. Spanish nationals are not subject to such a requirement. The Court of Justice has already considered (Case C-20/92, Anthony Hubbard v Peter Hamburger) that the imposition of a cautio iudicatum solvi only against EU citizens or firms and not a country's own nationals constitutes a barrier to the free movement of services, in breach of Article 59 of the EC Treaty.

The Commission also considers that the imposition of this requirement violates the EC Treaty's ban on discrimination on grounds of nationality (Article 6). Spain has informed the Commission that a new law on civil proceedings presented to the Spanish Parliament in November 1998 will suppress the financial guarantee requirement in question, but the new law has not yet been adopted.

Belgium - construction companies

The Commission has decided to refer Belgium to the Court of Justice concerning an obligation for construction companies from other Member States providing services in Belgium to contribute to schemes giving workers an end-of-year bonuses and compensating workers for time they cannot work due to bad weather. A Royal Decree of 15 June 1988 requires not only Belgian companies but also those established in other Member States to pay contributions to a private organisation, set up under a collective agreement for the construction sector, which manages a fund to pay end of year bonuses and 'bad weather' compensation to workmen. These contributions take the form of "fidelity stamps", which cost the equivalent of 9.12% of the workmen's gross pay, and "bad weather stamps", which cost the equivalent of 2.1% of gross pay.

The Commission considers that the imposition of these financial contributions on construction companies established in other Member States (in this specific case Luxembourg) and already paying into equivalent schemes there for the same workers and for the same periods of time constitutes an unjustified obstacle to the freedom to provide services, in violation of Article 59 of the EC Treaty. In the Commission's opinion, the Member State where services are offered should not impose such social protection contributions if the equivalent contributions are already paid in respect of the same workers in the Member State where the service provider is established. This view is in accordance with the case law of the Court of Justice (28.6.96 ruling on the 'Guiot/Climatec' case). The Belgian authorities' response to the reasoned opinion did not satisfy the Commission.

Germany -construction workers

The Commission has decided to send Germany a reasoned opinion because of certain restrictions on construction companies established in other Member States and wishing to offer their services in Germany. In particular, German legislation (notably the Law on Temporary Work - AÜG) does not allow a construction company to provide workers to another company unless it is a signatory of all the collective agreements applicable in the construction sector in Germany. In practice, this requires construction firms to have a permanent establishment in Germany if they want to provide workers to another company. The Commission regards this requirement as discriminatory and in violation of the right of establishment and the freedom to provide services (Articles 52 ad 59 of the EC Treaty).

Source:
RAPID
23 / 12 /1998